GREENVILLE — A merger gone wrong resulted in a $12.7 million judgment against an Anderson-based company and its owners, one of the largest business judgments in South Carolina this year.
Following a seven-day jury trial in a case that dates back four years, Patriot Industrial, a Delaware limited liability company, won a verdict directed against a group of interrelated defendants, including Patriot Solutions LLC, Group of Patriots LLC and others.
The case dates back to 2018 when Patriot Industrial cried foul against the Anderson company and its owners – Robert Merritt, Gregory Hughes and Charles Stewart – for unfulfilled terms of a merger the companies completed in 2016.
Patriot Solutions, an electrical construction company specializing in the design, construction and maintenance of high-voltage power lines for power utilities, has sold or transferred its companies’ assets to Patriot Industrial, a subsidiary of HKA , a global workforce solutions company.
Patriot Industrial claimed that after acquiring the company and paying $9.5 million to clear the old company’s line of credit, the old company failed to pay $5.6 million it owed. on two tickets or $7 million owed in a payroll deal with the new company.
The former company counterattacked, claiming it had been fraudulently drawn into the merger.
Four years later, the case went to trial in Greenville.
U.S. District Judge Joe Dawson dismissed the counterclaims and although a jury was seated for the trial, Dawson returned a verdict against Patriot Solutions because he failed to provide a defense to the charges to be brought by the jury.
Sarah Hurley represented the former company, Patriot Solutions, and said the company plans to file a motion for reconsideration and, if necessary, appeal the decision to the 4th US Circuit Court of Appeals. Because this is not a final judgment, Hurley said it would not be appropriate to comment further on the case.
John Devlin of Greenville, along with Doug Weiner and Tracey Kitzman of Song PC of New York, represented Patriot Industrial.
“We would like to think that the defendants would recognize that this case has been going on for quite a long time and should come to an end,” Devlin said.
Interest has accrued on unpaid bills and attorney fees for the four-year legal process, which could increase the judgment by millions of dollars. These figures are still being finalized.
Devlin said Judge Dawson dismissed the defense claim because the defendants had presented no evidence to support their claim.
“We felt completely vindicated when the judge ruled in our favor at law and there was nothing for a jury to decide,” Devlin said. “This case has been going on for more than four years, and my clients were thrilled that it ended like this.”
Follow Nathaniel Cary on Twitter at @nathanielcary